JAPANESE  STEWARDSHIP 

OF 

KOREA 

□ 

ECONOMIC  AND  FINANCIAL 


BY 

FRED  A.  DOLPH 


JAPANESE  STEWARDSHIP 

OF 

KOREA 

□ 

ECONOMIC  AND  FINANCIAL 


BY 

FRED  A.  DOLPH 


DEDICATED 
TO  THE 

PATRIOTS  OF  KOREA 


Copyrighted  by 
BYRON  S.  ADAMS 
512  11th  Street  N.  W. 
Washington,  D.  C. 
1920 


CONTENTS. 


Page 

Foreword  5 

Japanese  fiduciary  relation  to  Korea 8 

Japan  increases  Korea’s  National  Debt 8 

Japan  doubles  Korea’s  taxes 9 

Oriental  Development  Company  through  which  Japan 

exploits  Korea’s  Agricultural  Resources 10 

Japanese  Exploitation  of  Yalu  and  Tuman  River  Valley 

Forests  12 

Korean  Railroads  12 

Korean  Tramways  14 

Ginseng  Production 14 

Coal  Mines 14 

Salt  Works  15 

Iron  Mines 15 

Japanese  Confiscation  of  Korean  National  Forest  Parks 

and  Preserves 15 

Water  Works 15 

Miscellaneous  Industries  and  Utilities 16 

Balance  Sheet  between  Japan  and  Korea 17 

Land  Survey  18 

Proper  readjustment  of  Korean  National  Debt 19 

List  of  Subjects  covered  by  Documents  in  Appendix.  ...  21 

Treaties  between  Korea  and  Japan  showing  Japan’s  fidu- 
ciary relation 22 

Agreement  Respecting  the  Coast  Trade  of  Korea 26 

Japan’s  Declaration  on  Assuming  Protectorate 28 

Charter  of  Oriental  Development  Company 29 

Treaty  relating  to  above 38 

Treaty  Regarding  Central  Bank 39 

Differences  between  Treaty  and  Final  Charter  for  Central 

Bank  40 

Charter  of  Bank  of  Chosen 41 

Details  of  Korean  National  Debt  as  Reported  by  Japan.  . 43 

Schedule  by  Years  of  Increase  of  Taxes  by  Japan  over 
Korean  Normal  Tax  44 


Digitized  by  the  Internet  Archive 
in  2016 


https://archive.org/details/japanesestewards00dolp_0 


FOREWORD. 


Japan  occupies  a fiduciary  relation  to  Korea  and  that 
relation  is  emphasized  by  the  fact  that  she  assumed  that 
position  by  self-appointment.  At  some  time  she  must 
render  a strict  final  account  of  her  stewardship,  as  agent 
and  trustee,  for  she  entered  Korea  under  a solemn  treaty 
covenant,  declaring  that : “The  Imperial  Government  of 
Japan  definitely  guarantees  the  independence  and  territo- 
rial integrity  of  the  Korean  Empire.” 

So  much  is  said,  by  Japanese  and  pro-Japanese,  about 
the  material  benefits  that  have  accrued  to  the  Korean 
people  from  Japanese  domination  and  control  of  Korea, 
that  I have  been  led  to  make  an  investigation  of  the 
facts,  from  a purely  economic  and  financial  standpoint ; 
ignoring,  for  the  time  being,  all  questions  of  Japanese 
violations  of  national  honor,  sanctity  of  treaties,  funda- 
mental rights,  morals  and  political  justice. 

Having  made  this  investigation,  with  access  to  both 
Korean  and  Japanese  records,  and  with  reliable  informa- 
tion from  other  sources,  I am  compelled,  in  justice  to  an 
unfortunate  and  oppressed  people,  who  have  been  unheard 
on  this  question,  to  publish  the  facts.  Wherever  Japanese 
and  Korean  records  have  been  in  conflict,  as  to  amounts 
received  or  expended,  I have  adopted  Japanese  statistics, 
in  order  that  no  injustice  may  be  claimed.  The  facts  are  a 
sad  enough  reflection  upon  Japan’s  management,  in  either 
case. 

Japan  parades  before  the  world  that  $67,000,000  has  been 
spent  in  Korea,  in  extension  of  railroads,  building  of  high- 
ways, paving  streets,  installing  water  works,  sewers,  im- 
proving harbors  and  other  public  works,  and  in  govern- 
ment-owned industrials.  The  world  should  know,  also, 
that  for  all  these  purposes  $38,000,000  in  excess  of  that 
amount  has  been  taken  out  of  Korea,  by  way  of  increased 
taxes  and  enlargement  of  the  national  debt. 


6 


We  hear  it  claimed  on  all  sides  that  Japan  is  doing  great 
things  by  way  of  afforestation  in  Korea.  The  simplest 
incidents  are  enlarged  upon  and  elaborated  with  printed 
and  pictured  propaganda.  In  one  pamphlet  is  a large 
full  page  reproduction  of  a photograph  of  a few  school 
children  on  a Korean  mountainside,  said  to  have  been 
taken  on  Arbor  Day,  a memorial  holiday  fixed  by  the  Jap- 
anese to  commemorate  the  death  of  Emperor  Jimmu. 
This  may  be  evidence  of  the  fact  that  Koreans  are  noth- 
ing loathe  to  celebrate  the  death  of  a Japanese  Emperor, 
but  is  not  convincing  that  the  amount  of  afforestation 
there  shown  offsets  the  devastation  of  the  Korean  national 
forest  preserves. 

In  the  same  pamphlet  is  another  full  page  cut  of  a 
twig,  perhaps  a foot  high,  being  watched  over  by  the 
Japanese  Governor-General  and  his  whole  suite  in  full 
regalia,  but  you  can  well  believe  that  their  thoughts  are 
on  another  scene  of  the  same  moment — the  broad  waters 
of  the  Yalu  and  Tumen  Rivers,  filled  from  bank  to  bank 
with  great  logs  cut  by  Japanese,  floating  to  Japanese  mills 
for  sawing  and  export,  where  a thousand  cho  of  Korean 
forests  are  being  devastated  to  every  fraction  of  a cho 
that  is  being  planted. 

In  the  same  line  we  find  references  to  what  great  things 
Japan  has  done  in  the  extension  of  railroads;  but  the  fact 
is  suppressed,  though  a matter  of  public  record,  that  the 
railroad  from  Fusan  to  Masampo  and  from  Seoul  to 
Antung  was  built  by  the  Japanese  War  Department  at  the 
time  of  the  Russian  War  as  a military  necessity,  and  after 
the  war  its  expense  was  saddled  onto  Korea,  and  Korea’s 
National  Debt  was  correspondingly  increased. 

Japanese  say  that  foreign  trade  with  Korea  has  been 
doubled.  Why  should  it  not  show  an  increase  when  Jap- 
anese ships  are  carrying  away  Korea’s  timber  by  millions 
of  feet  per  annum  ; her  coal  at  the  rate  of  over  a thousand 
tons  a day;  her  iron  ore  at  about  the  same  rate,  and  gold 
and  silver  bullion  from  her  mines  is  being  exported  at  the 
rate  of  between  $7,000,000  and  $0,000,000  per  annum  ? 


7 


The  same  things  are  true  about  the  financial  and  banking 
conditions.  Japan  claims  to  have  established  a great  bank 
in  Seoul.  Its  banking  office  is  shown  as  one  of  the  sights 
of  the  city,  but  the  fact  is  concealed  that  the  greater  part 
of  its  supposed  reserve,  for  currency  issued,  is  ordinary 
bills  discounted  and  notes  of  hand,  to  say  nothing  of  the 
fact  that  a claimed  reserve  of  specie  of  about  17,000,000 
yen  is  10,000,000  yen  in  excess  of  all  the  specie  in  the 
whole  country  of  Korea.  A palpable  and  obvious  false- 
hood. The  bank  would  be  immediately  closed  if  located 
in  this  country,  or  any  other  with  a sound  financial  banking 
system. 

The  facts  on  these  subjects,  and  kindred  matters,  are 
submitted  to  the  public  in  as  simple  and  concise  form  as 
I am  able  to  present  them.  References  to  money,  dimen- 
sions and  distances  are  converted  into  United  States  de- 
nominations and  units  in  order  that  they  may  be  more 
quickly  comprehended. 

FRED  A.  DOLPH. 

Washington,  D.  C., 

April,  1920. 


JAPANESE  STEWARDSHIP  OF  KOREA. 

The  Appendix  to  this  statement  contains  copies  of  the 
treaties  and  agreements  between  Japan  and  Korea,  at  the 
inception  of  the  Japanese  stewardship  of  Korea,  all  center- 
ing around  and  based  upon  the  following  specific  provision : 

Article  III.  The  Imperial  Government  of  Japan 
definitely  guarantees  the  independence  and  territorial 
integrity  of  the  Korean  Empire. 

This  is  the  provision  under  which  Japan  entered  Korea, 
and  whatever  Japan  has  done,  must  be  considered  as  done 
in  the  capacity  of  agent  and  trustee,  for  its  principal, 
Korea.  The  final  accounting  must  be  had,  with  that  fact 
constantly  in  mind.  That  Japan  has  long  since  reduced  the 
quoted  provision  to  a mere  “scrap  of  paper”  is  beside  the 
question.  The  agent  and  trustee  cannot  deny  the  existence 
and  entity  of  his  principal,  nor  a tenant  set  up  an  adverse 
title  to  his  landlord. 


National  Debt. 

The  world  will  date  the  commencement  of  the  active 
stewardship  that  Japan  inflicted  on  Korea  from  the  time 
of  the  alleged  Protectorate — November  17th,  1905.  At 
that  time  Korea  had  no  national  debt,  except  small  tem- 
porary loans  and  current  running  indebtedness,  aggregat- 
ing, when  final  adjustments  and  payments  were  all  made, 
$368,256.50. 

When  Japan  appointed  itself  guardian  of  Korea,  against 
her  wishes  and  her  protests,  Korea  may  have  been  poor. 
She  may  not  have  had  all  of  the  improvements  that  make 
for  luxury  and  convenience,  but  she  knew  what  she  had, 
and  enjoyed  what  she  had,  without  debtor’s  worries.  She 
was  out  of  debt.  She  had  lived  within  her  means. 

At  the  time  of  the  supposed  annexation  on  August  27th, 
1910.  Japan  had  increased  Korea’s  national  debt  to  $22.- 


9 


063,226.50,  and  on  December  31st,  1917,  it  reports  this 
indebtedness  to  be  still  further  increased  to  $16,843,415. 
Consequently,  the  increase  in  national  indebtedness  under 
Japanese  stewardship  and  management  has  been  the  dif- 
ference between  the  original  indebtedness  of  $368,256.50 
and  the  present  reported  national  debt  of  $46,843,415.00, 
which  is  $46,475,158.50.  It  is  obvious  that  for  this  latter 
sum  Japan  must  make  some  accounting  by  way  of  improve- 
ments, good  roads,  public  works,  etc. 

Korea’s  annual  interest  charge  has  risen  to  $2,522,063.37, 
which  is  over  40  per  cent  of  the  total  of  her  former  normal 
annual  expense. 


Taxes. 

Increasing  the  national  debt  by  over  forty-six  millions 
of  dollars  is  not  the  only  evidence  of  Japanese  financial 
efficiency.  Taxes  were  increased  beyond  normal,  to  an 
almost  unbelievable  amount,  and  in  considering  what 
Japan  must  account  for  in  betterments,  good  roads,  public 
works,  etc.,  we  must  also  take  into  account  the  excess 
taxes  and  revenues  collected  by  Japan  from  the  Korean 
people,  over  the  normal  amount. 

We  hear  it  reiterated,  time  and  again,  that  one  of  the 
moving  causes  for  Japanese  interference  in  Korean  affairs, 
was  to  protect  the  people  against  extortion  and  taxes. 
That  being  their  avowed  purpose,  then  no  objection  can 
be  taken  to  the  premises  of  adopting  the  last  Korean 
expense  for  1905,  as  the  normal  administration  expense 
for  Korea.  Using  that  figure,  $3,561,907.50,  as  the  annual 
base,  then  if  Korea  had  been  left  to  her  own  devices,  the 
people  would  have  paid  a total  in  the  twelve  years,  from 
1905  to  1917.  of  $42,742,890,  but  the  Japanese  collected 
over  twice  as  much  in  that  time,  a total  of  $92,841,767.50, 
so  that  Japan  has  another  item  of  $50,098,877.50  to  account 
for  in  betterments,  improvements,  good  roads,  etc. 


10 


Oriental  Development  Company. 

The  Oriental  Development  Company,  Limited,  was 
chartered  by  Japan  by  Law  No.  63  on  August  26th,  1908, 
during  the  period  of  the  so-called  protectorate  of  Korea. 
Its  stated  purpose  was  to  engage  “in  exploitation  enter- 
prises in  Korea.”  Its  capital  was  fixed  at  $5,000,000.00. 
Its  charter  contained  the  usual  Japanese  provisions  for 
governmental  control  and  domination.  Its  President  must 
be  a Japanese  subject  and  at  least  two-thirds  of  its  Direc- 
tors must  be  Japanese.  It  wras  authorized  to  own  and 
lease  lands,  make  loans  to  tenants  and  settlers;  and  could 
issue  debentures  against  such  loans,  practically  without 
restriction,  except  that  they  should  not  exceed  twice  the 
capital  stock.  It  was  required  to  lay  by  8 per  cent  of  its 
profits  to  provide  for  deficit  in  capital  stock  and  2 per 
cent  additional  to  “equalize  dividends,”  whatever  that  may 
mean  in  practical  Japanese  application.  It  was  a Govern- 
ment controlled  Private  Corporation,  with  private  stock- 
holders, and  began  business  with  the  year  1909. 

Although  this  was  a private  owned  corporation,  Japan 
compelled  the  Korean  Government  to  turn  over  to  it  all 
of  the  government-owned  cultivated  lands  in  Korea,  and 
to  accept  stock  in  return,  great  care  being  taken  that 
Korea  should  never  have  over  about  30  per  cent  of  the 
entire  issue  of  stock. 

It  might  be  well  to  explain,  that  these  government- 
owned  cultivated  lands  in  Korea,  grew  out  of  the  ancient 
plan  for  raising  government  or  common  funds.  A square 
or  plot  was  divided,  as  near  as  possible,  into  nine  smaller 
plots  of  equal  size — similar  to  the  section  divisions  in  a 
township.  The  center  plot  was  the  commons  or  govern- 
ment land.  It  was  cultivated  by  the  surrounding  eight 
families,  and  the  product  went  into  the  common  govern- 
ment fund. 

These  initial  land  holdings,  obtained  by  the  Oriental 
Development  Company  from  the  Korean  Government, 
aggregated  24,593  acres,  and  as  the  lands  were  taken  over 


11 


stock  was  issued  to  Korea,  and  the  outstanding  stock  of 
the  corporation  was  correspondingly  increased  in  each 
instance  of  addition,  so  that  Korea  should  not  at  any  time 
have  stock  control,  until  finally  the  total  authorized  capital 
stock  of  the  corporation  stood  at  $5,000,000,  with  the 
amount  issued  to  Korea  at  $1,500,000. 

In  many  ways,  said  to  be  devious  and  oppressive,  the 
corporation  increased  its  land  holdings  until  they  stood  at 
the  end  of  1917  at  179,786  acres,  which  is  over  2 per  cent 
of  the  entire  cultivated  area  of  Korea,  reported  at  8,794,282 
acres  It  has  issued  debentures  to  the  amount  of  $9,675,- 
000,  from  the  proceeds  of  which  it  has  made  loans  to  occu- 
pants of  other  lands  on  oppressive  and  usurious  terms,  so 
that  the  whole  agricultural  country  is  in  the  grasp  of  this 
Japanese  monopoly. 

However,  the  ways  and  methods  of  this  corporation  is 
another  story,  as  I have  pledged  myself  to  refer  to  only 
existing  economic  conditions  and  results  from  a money 
standpoint.  The  company  has  never  paid  a dividend  of 
less  than  6 per  cent;  several  years,  61/2  per  cent,  and  one 
year  7 per  cent,  and  reports,  at  the  end  of  1917,  that  it 
has  a surplus  of  $334,750. 

In  any  event,  Korea  is  entitled  to  dividends  upon  the 
stock  issued  to  it,  and  to  a proportion  of  the  surplus  on 
the  basis  of  that  capital  stock.  The  dividends  and  division 
of  surplus  to  which  Korea  is  entitled,  follow: 


6 per  cent  dividend  on  $375,000  stock  issued 

to  Korea,  first  three  years  of  operation.  . $67,500 
6V2  per  cent  dividend  on  $750,000  stock  issued 

to  Korea,  fourth  year  of  operation 48,750 

7 per  cent  dividend  on  $1,125,000  stock  is- 

sued to  Korea,  fifth  year  of  operation.  . . 78,750 

6V2  per  cent  dividend  on  $1,500,000  stock  is- 
sued to  Korea,  succeeding  five  years.  . . . 487,500 
30  per  cent  of  surplus  of  $334,750 100,425 


Total  dividends  and  surplus  due  Korea  to  end 

of  1917  $782,925 


12 


This  is  another  little  item  of  nearly  a million  dollars 
that  must  be  put  in  the  account  against  Japan  to  offset 
improvements  and  public  works. 

Yalu  and  Tumen  River  Lumber  Undertaking. 

In  1907  the  Japanese  Government  forced  a treaty  upon 
Korea,  that  in  practical  effect  made  the  two  governments 
partners  in  the  project  of  cutting  off  Korea’s  timber  from 
the  valleys  of  the  Yalu  and  Tumen  rivers,  that  form  the 
northern  boundary  of  Korea.  The  Korean  Government 
furnished  the  land  and  the  timber  and  was  to  receive  one- 
half  of  the  profits  of  this  undertaking. 

During  the  nine  years  of  the  operation  of  this  project 
the  Japanese  government  invested  $406,000  in  mills  and 
lumbering  equipment ; felled  15,185,294  cubic  shaku  (shaku 
is  about  a cubic  foot),  costing  $1,611,235.50  delivered  at 
the  selling  station.  The  total  sales  were  $3,937,476.50, 
netting  a total  profit  of  $2,326,241.00,  of  which  the  one- 
half  due  Korea  is  $1,163,140.50. 

There  is  a conflict  of  authority,  as  to  whether  this  ac- 
counting includes  the  lumber  used  in  railroads  and  public 
works  and  in  building  Japanese  barracks,  which  is  a very 
considerable  item;  but  in  any  event,  and  beyond  doubt,  at 
least  the  above  sum  of  $1,163,140.50  should  be  charged 
against  Japan’s  cost  of  improvements  in  Korea,  and  Japan 
should  be  credited  with  the  $406,000  expended  in  capital 
account,  unless  she  elects  to  keep  the  mills  and  equipment 
for  use  in  a similar  project  on  the  Manchurian  side  of  these 
two  rivers. 


Operation  of  Railroads. 

The  physical  property  now  consists  of  the  main  line  of 
single  track  from  Fusan  through  Seoul  to  Antung,  a dis- 
tance of  584.6  miles,  laid  with  76-pound  rail,  and  an  aggre- 
gate of  481.4  miles  of  branch  lines,  laid  with  65-pound  rail, 
running  to  various  ports — that  is,  to  Masampo,  Mokpo, 
Kunsan,  Chemulpo,  Chinampo  and  Wonsan  and  beyond. 


la 


making  a total  mileage  of  1,066.  There  are  ten  bridges  or 
so,  across  the  Yalu  and  other  waterways,  having  an  aggre- 
gate length  of  17,276  feet ; and  about  as  many  tunnels,  with 
an  aggregate  length  of  10,470  feet.  The  gauge  is  standard, 
and  the  ties  are  chestnut  and  similar  quality.  The  Branch 
to  Chemulpo  is  graded  and  bridged  for  double  tracks,  but 
only  one  track  is  laid.  The  equipment  consists  of  175 
engines,  370  passenger  cars  and  about  1,800  freight  cars. 

At  the  commencement  of  the  Russian-Japanese  War  in 
1904,  the  railroads  in  Korea  had  a mileage  of  about  300 
miles  and  had  been  built  at  a reported  cost  of  approximate- 
ly $20,000,000.  Physically,  the  lines  extended  from  Seoul 
to  Fusan,  with  a branch  to  Chemulpo. 

The  War  Department  of  Japan  immediately  took  over 
this  line  of  railroad,  and  extended  the  line  from  Fusan  to 
Masampo,  and  from  Seoul  to  Antung,  to  facilitate  the 
movement  of  troops  through  Korea  to  Siberia  and  Man- 
churia, increasing  the  mileage  to  641  miles. 

After  the  conclusion  of  the  war,  all  of  this  expense  was 
saddled  onto  Korea,  and  Korea  became  a part  owner  of 
the  railroad.  From  time  to  time,  after  that,  extensions 
were  made  and  permanent  bridges  were  built,  until  in 
1917,  the  total  capital  account  stood  at  $73,362,500,  of 
which  Korea’s  share  was  $37,645,123. 

This  latter  sum  is  the  accumulation  of  several  years  of 
Korean  taxes  and  proceeds  from  its  national  obligations, 
so  that  Korea  is  entitled  to  a pro  rata  of  the  net  receipts 
of  the  operation  of  the  railroads,  as  its  money  and  resources 
were  furnished  and  charged  against  it,  from  time  to  time, 
in  proportion  to  the  original  investment  in  railroads.  A 
computation  on  this  basis  gives  Korea  $1,967,505.50.  For 
this  latter  amount  Japan  must  be  charged,  and  she  will  be 
given  due  credit  for  the  capital  account  said  to  have  been 
expended  in  extensions  and  betterments. 

In  giving  credit  for  this  capital  account  of  $37,645,123, 
no  reasonable  man  can  help  but  think  and  believe,  that  it 
is  at  least  twice  what  it  should  be,  and  doubtless  many 
times  what  it  should  be.  However,  I have  started  out  to 


14 


give  Japan  the  benefit  of  all  doubts,  and  for  the  time  being, 
will  do  so  in  this  case. 

Yet  we  cannot  help  but  remember,  that  the  right  of 
way  was  practically  all  confiscated,  together  with  ties, 
bridge  timbers  and  much  other  material;  that  over  half 
of  the  labor  was  not  paid  for  at  all,  and  the  other  half  paid 
but  a mere  pittance.  I have  no  doubt  that  any  responsible 
American  contractor  would  undertake  to  duplicate  the 
extensions  and  betterments  Japan  has  made  at  Korea’s 
expense,  under  the  same  conditions  as  to  labor  and  ma- 
terials, for  from  ten  to  fifteen  millions  of  dollars. 

Tramways. 

The  government-owned  tramways — that  is,  those  built 
and  financed  with  Korean  taxes  and  public  loans,  in  1917 
were  79.3  miles  and  are  said  to  have  cost  $1,203,000,  and 
to  earn  about  $7,000  or  $8,000  per  year  net;  the  last  re- 
ported gross  receipts  being  $117,337.50  and  expenditures 
being  $110,024.50. 


Ginseng  Receipts. 

From  time  immemorial  the  production  of  ginseng,  a 
medicinal  herb,  has  been  one  of  the  specialties  of  Korean 
agriculture.  The  product  has  always  been  sold  to  the 
government  and  by  it  resold,  and  the  profits  have  been  no 
inconsiderable  part  of  the  governmental  revenue.  From 
1908  to  the  end  of  1916  the  purchases  of  ginseng  aggregat- 
ed $1,107,696.00,  and  the  sales  were  $3,321,665.50,  produc- 
ing a profit  of  $2,213,969.50. 

Coal  Mining. 

Government  operated  coal  mines  are  located  near  Pyeng 
Yang.  The  physical  properties,  consisting  of  7 miles  of 
railroad  sidings,  4 mining  stations,  3 loading  piers,  etc., 
are  said  to  have  cost  $627,981.50.  During  five  years  of 
operation  to  the  end  of  fiscal  year,  1916,  959,340  tons  of 
coal  were  mined.  The  sales  were  $3,836,761.50,  and  the 


15 


operating  expenses  $3,258,196.00,  producing  a profit  of 
$578,516.50.  This  latter  sum  should  be  accounted  for  by 
Japan,  and  Japan  should  be  credited  with  the  capital  ac- 
count. 


Salt  Works. 

Government  operated  salt  works  are  located  near 
Chemulpo  and  near  Chinampo,  with  an  aggregate  pan 
area  of  2,524.24  acres,  said  to  have  cost  $582,143.50.  Pro- 
duction commenced  in  1913,  and  three  years’  operation 
produced  a profit  of  $347,794.00. 

Iron  Mines. 

Iron  mines  were  opened  in  Hoanghai  Province,  with 
a shipping  port  at  Chinampo,  in  1907,  and  were  operated 
two  years  as  a government  project,  and  then  turned  over 
to  a private  Japanese  corporation.  During  the  period  of 
government  operation  the  profits  were  $165,481.50.  Since 
1909  thousands  of  tons  of  iron  ore  have  been  taken  out  by 
this  Japanese  corporation,  with  no  return  or  royalty  of 
any  kind  to  Korea,  except  nominal  fees  for  mining  permits. 

Amounts  Confiscated  from  Forest  Preserves. 

For  hundreds  of  years  certain  tracts  of  forests  and 
mountains,  for  sentimental,  historic  and  practical  reasons, 
have  been  kept  intact  and  undisturbed  by  Korea;  but 
Japan,  trampling  down  all  sentimental,  artistic  and  historic 
reasons,  has  gone  into  these  preserves,  and  the  products 
she  has  obtained  by  their  devastation,  up  to  1917,  realized 
$586,305.50. 


Water  Works. 

There  are  four  government-owned  water  works  plants 
in  Korea:  Seoul,  purchased  from  Collbran  & Bostwick  at 
$1,408,076.50;  Chemulpo,  constructed  at  a cost  of  $1,204,- 
919.50;  Pyeng  yang,  constructed  at  a cost  of  $650,000,  and 
Chinampo,  constructed  at  a cost  of  $210,000.  The  net  re- 


16 


ceipts  from  these  plants  up  to  1917  aggregated  $370,354.00, 
for  which  amount  Japan  should  account,  due  credit  being 
given  for  the  cost,  or  capital  account. 

Miscellaneous  Industrials  and  Utilities. 

A number  of  industries  and  utilities  have  been  inaugu- 
rated and  their  extension  and  enlargement  has  been  ab- 
sorbed by  the  net  receipts.  The  principal  item  would  be 
telephones  and  telegraphs  that  are  operated  as  a part  of 
the  postal  system.  In  this  system  the  receipts  and  ex- 
penditures are  kept  about  even  and  extensions  are  made 
out  of  the  earnings.  The  same  is  true  of  a brick  plant 
that  was  started  near  Mokpo,  the  government  printing 
plant  at  Seoul,  and  a number  of  other  more  or  less  impor- 
tant industrials  and  utilities.  In  this  situation  it  is  not 
necessary  to  complicate  this  statement  of  a general  debit 
and  credit  balance,  between  Japan  and  Korea,  with  their 
details. 

These  preliminary  explanations  will  enable  the  reader 
to  understand  the  following  debit  and  credit  balance  sheet 
between  Korea  and  Japan,  showing  the  real  result  of  the 
Japanese  Self-Appointed  Stewardship  of  Korea  up  to  the 
end  of  1917.  This  statement  is  closed  with  the  end  of 
1917,  because  only  fragmentary  details  and  statistics  could 
be  obtained  from  Japanese  sources  since  that  time,  and  the 
writer  did  not  care  to  have  it  said  that  he  relied  wholly 
upon  Korean  authority  in  any  instance.  The  purpose  is  to 
make  this  compilation  incontestable  and  absolutely  im- 
partial. 


17 


Balance  Sheet  Between  Japan  and  Korea. 

November  17th,  1905,  to  December  31st,  1917. 

Extraordinary  Receipts  by  Japan — 

Increase  in  Korea’s  national  debt $16,175,158.50 

Excess  taxes  collected  by  Japan  in  Korea 

over  normal  tax 50,098,877.50 

Dividends  due  Korea  on  stock  in  the 

Oriental  Development  Company 782,925.00 

One-half  profit  due  Korea  from  the  Yalu 

and  Tumen  river  lumber  undertaking.  1,163,110.50 
Dividends  due  Korea  from  operation  of 

railroads  1,967,505.50 

Dividends  due  from  operation  of  tramways 

or  narrow  guage  railroads 32,000.00 

Proceeds  from  conduct  of  ginseng  traffic.  . 2,213,969.50 

Proceeds  from  operation  of  coal  mines. . . . 578,516.50 

Proceeds  from  operation  of  salt  works. . . . 317,791.00 

Proceeds  from  operation  of  iron  mines. . . . 165,181.50 

Amounts  confiscated  from  forest  preserves 

and  parks 586,305.50 

Profits  from  operation  of  water  works  at 
Seoul,  Chemulpo,  Pyeng  Yang  and 
Chinampo  370,351.00 


Total $101,782,028.00 

Extraordinary  Expenditures  by  Japan — 

Extension  of  railroads $37,615,123.00 

Capital  account  lumber  undertaking 106,000.00 

Capital  account  coal  mines 627,981.50 

Capital  account  salt  works 582,113.50 

Capital  account  tramways 1,203,000.00 

Capital  account  water  works 3,172,996.00 

Roads  and  streets 5,721,999.50 

Bridges 2,650,000.00 

Harbors  1,108,111.50 

Buildings  1,162,572.00 

Land  survey 8,331,539.50 

Forestry  survey  183,768.50 

Hospitals  171,197.50 

Submarine  cable 80,000.00 


$66,619;735.50 

Difference  in  favor  of  Korea $38,132,292.50 


18 


Land  Survey. 

The  largest  item  in  the  expenditure  side  of  the  fore- 
going schedule,  outside  of  railroad  extension,  is  $8,331,- 
539.50,  said  to  have  been  spent  for  “Land  Survey.” 

The  necessity  for  this  expenditure  can  well  be  doubted. 
The  American  Minister  to  Korea  in  one  report  to  the 
State  Department,  dated  August  21st,  1883,  says:  “The 

title  to  lands  are  derived  from  the  government  and  are 
carefully  registered  in  local  offices.”  In  a later  report 
from  the  same  source,  dated  March  20,  1886,  is  found  the 
statement:  “The  excellence  and  great  number  of  maps 

to  be  found  are  remarkable.  There  are,  even  in  the  small- 
est villages,  maps  on  large  scales,  showing  minute  details.” 

Koreans  strenuously  insist  that  there  was  no  occasion 
for  this  expenditure;  that  if  records  and  surveys  were  lack- 
ing it  was  because  the  Japanese  had  themselves  destroyed 
them.  That  the  real  object  of  this  expenditure  was  graft, 
and  if  it  had  any  use  whatever  it  was  to  enable  the  Oriental 
Development  Company  to  locate  particularly  fertile  fields 
for  its  exploitations. 

The  statements  of  our  own  American  Ministers  upon 
which  we  must  and  should  rely,  being  entirely  disinterest- 
ed, bear  out,  at  least  give  great  force,  to  the  Korean  con- 
tentions in  regard  to  this  enormous  expense  for  “Land 
Survey.”  However,  the  expenditure  is  said  to  have  been 
made,  and  for  the  purposes  of  this  statement  will  be  al- 
lowed to  stand. 

Readjustment  of  National  Debt. 

If  the  Japanese  financiers  who  were  advising  Korea,  or 
more  accurately,  dominating  Korea,  had  applied  the  excess 
of  extraordinary  receipts  over  expenditures,  as  shown  by 
the  schedule  that  has  just  been  set  out,  to  the  reduction 
of  Korea’s  national  debt,  it  would  have  been  only  $8,342,- 
866.00,  instead  of  $46,475,158.50. 

There  is  another  offset  or  claim  of  extraordinary  expense 
made  by  Japan,  but  it  needs  prayerful  consideration.  They 


19 


claimed  that  Korean  coinage  needed  reforming,  which,  of 
course,  was  just  the  forerunner  and  excuse  for  Japanizing 
it.  All  of  the  Korean  coins,  nickel,  copper  and  brass,  were 
withdrawn  from  circulation,  and  the  Japanese-minted  coin 
was  substituted.  By  this  process  9,438,431  yen  of  nickels, 
and  4,212,210  yen  of  copper  and  other  coins,  totaling  in  our 
money  $6,825,320.50,  was  called  in  and  changed  to  ex- 
trinsic money  value.  A credit  of  only  $847,550.00  is  given 
for  the  old  metal,  nominally  showing  a loss  of  nearly 
$6,000,000. 

In  other  words,  Japan  would  have  us  believe  that  the 
intrinsic  value  of  Korean  coins,  put  out  at  full  intrinsic 
value,  was  only  .0125  of  par,  and  that  they  had  been  de- 
based .9875  below  par  by  the  Korean  government.  This 
is  too  stupendous  a misrepresentation  to  be  considered  in 
even  a prima  facie  showing. 

Even  if  we  concede  the  necessity  for  this  change  in 
coinage,  25  per  cent  loss  between  face  value  and  intrinsic 
value  would  be  a large  allowance,  under  the  circumstances. 
Place  this  loss  at  $1,800,000.00  and  it  would  still  be  an 
injustice  to  Korea. 

Japan  is  a stockholder  in  the  Bank  of  Chosen  to  the 
extent  of  $1,500,000,  and  has  extended  government  aid  to 
the  bank  to  the  extent  of  $600,000  so  that  it  has  an  interest 
in  the  bank  of  $2,100,000.00  and  it  is  owing  the  bank 
$1,875,000.00,  so  that  after  paying  its  loans  its  interest  in 
the  bank  is  really  only  nominal,  about  $225,000.00. 

Consequently  if  we  add  both  of  the  items  last  referred 
to  the  $8,342,866.00  mentioned  in  the  first  paragraph  of 
this  subject,  we  would  only  have  $10,367,866.00  as  the 
national  debt  of  Korea,  using  Japanese  figures  and  statis- 
tics in  every  instance,  except  in  the  one  instance  of  the 
alleged  loss  in  redemption  of  old  Korean  coins. 

CONCLUSION. 

The  time  must  come  when  a final  economic  and  financial 
adjustment  will  have  to  be  made  by  Japan  of  her  steward- 
ship of  Korea,  and  the  results  of  this  investigation  make  it 


20 


perfectly  plain  and  simple  as  to  what  that  adjustment  will 
be.  The  purpose  of  this  statement  has  been  to  define  and 
state  the  issues.  Japanese  statements  and  information  as 
to  details  have  been  purposely  taken,  in  order  that  there 
should  be  no  collateral  discussion  as  to  isolated,  individual 
items,  to  cloud  the  main  issues. 

If  it  is  possible  to  ignore  the  question  of  indemnity  to 
Korea  for  unlawful  occupation  and  usurpation;  the  thou- 
sands that  have  been  murdered;  the  hundreds  of  thousands 
that  have  been  maimed  and  wounded,  the  more  hundreds 
of  thousands  that  have  been  tortured  and  imprisoned,  and 
the  fact  that  all  Korea  has  been  robbed  of  its  freedom  and 
liberty  for  more  than  twelve  years;  and  if  it  is  possible  to 
accept  Japanese  padded  figures  and  distorted  accounts, 
then  upon  Japan’s  own  showing,  the  least  that  she  can  do 
is  to  get  out  of  Korea  and  turn  over  to  Korea  all  her  gov- 
ernmental, economic  and  financial  interests  in  the  country, 
and  cancel  all  of  the  supposed  national  debt  of  Korea,  down 
to  somewhere  near  what  it  should  be — on  her  own  show- 
ing as  demonstrated  in  this  statement,  to  approximately 
$10,000,000. 

Privately  owned  economic  and  financial  interests  in  the 
hands  of  private  citizens  of  Japan,  for  the  most  part  are 
represented  by  stock  in  corporations,  that  can  easily  be 
reorganized  or  made  subject  to  just  general  incorporation 
laws  of  Korea,  protective  alike  to  all  nationals. 

No  difficulties  are  presented  by  the  economic  and  finan- 
cial situation  that  can  not  readily  be  worked  out.  The 
great  question  is,  how  long  will  the  world  stand  idly  by 
without  protest  or  intervention,  watching  one  of  the  oldest 
nations  on  earth  being  strangled  to  death? 


21 


APPENDIX. 

Subjects : 

A.  . . .Treaty  of  February  23rd,  1904. 

B.  . . .Treaty  of  August  22nd,  1904. 

C.  . . .Treaty  of  April  1st,  1905,  relating  to  posts  and 

telegraphs,  etc. 

D. ... Treaty  of  August  13th,  1905,  relating  to  coast 

trade. 

E.  . . .Japanese  proclamation  of  November  22nd,  1905. 

F.  . . .Charter  of  the  Oriental  Development  Company. 

G. ... Treaty  relating  to  lumber  undertaking  along 

the  Yalu  and  Tumen  rivers. 

H.  . . .Treaty  relating  to  the  organization  of  a central 

bank. 

I . . . .Charter  of  the  Bank  of  Chosen. 

J . . . .Schedule  of  national  debt  as  reported  by  Japan 

up  to  December  31st,  1917. 

K ....  Schedule  of  excess  taxes  collected  by  Japan 

APPENDIX. 

A. 

Protocol  Concluded  Between  Japan  and  Korea  on  February 
23,  1904,  Regarding  the  Situation  at  Korea. 

Hayashi  Gonsuke,  Envoy  Extraordinary  and  Minister 
Plenipotentiary  of  His  Majesty  the  Emperor  of  Japan, 
and  Major-General  Ye-tchi-yong,  Minister  of  State  for 
Foreign  affairs  ad  interim  of  His  Majesty  the  Emperor 
of  Korea,  being  respectively  duly  empowered  for  the  pur- 
pose, have  agreed  upon  the  following  Articles : 

Article  1.  For  the  purpose  of  maintaining  a permanent 
and  solid  friendship  between  Japan  and  Korea,  and  firmly 
establishing  peace  in  the  Far  East,  the  Imperial  Govern- 
ment of  Korea  shall  place  full  confidence  in  the  Imperial 
Government  of  Japan  and  adopt  the  advice  of  the  latter  in 
regard  to  improvements  in  administration. 

Article  II.  The  Imperial  Government  of  Japan  shall  in 
a spirit  of  firm  friendship,  ensure  the  safety  and  repose  of 
the  Imperial  House  of  Japan. 

Article  III.  The  Imperial  Government  of  Japan  defin- 
itively guarantee  the  independence  and  territorial  integrity 
of  the  Korean  Empire. 


22 


Article  IV.  In  case  the  welfare  of  the  Imperial  House 
of  Korea  or  the  territorial  integrity  of  Korea  is  endangered 
by  aggression  of  a third  Power  or  by  internal  disturbance, 
the  Imperial  Government  of  Japan  shall  immediately  take 
such  necessary  measures  as  the  circumstances  require,  and 
in  such  cases  the  Imperial  Government  of  Korea  shall  give 
full  facilities  to  promote  the  action  of  the  Imperial  Jap- 
anese Government. 

The  Imperial  Government  of  Japan  may,  for  the  attain- 
ment of  the  above-mentioned  objects,  occupy,  when  the 
circumstances  require  it,  such  places  as  may  be  necessary 
from  strategical  points  of  view. 

Article  V.  The  Government  of  the  two  countries  shall 
not  in  future,  without  mutual  consent,  conclude  with  a 
third  Power  such  an  arrangement  as  may  be  contrary  to 
the  principles  of  the  present  Protocol. 

Article  VI.  Details  in  connection  with  the  present  Pro- 
tocol shall  be  arranged  as  the  circumstances  may  require, 
between  the  Representative  of  Japan  and  the  Minister  of 
State  for  Foreign  Affairs  of  Korea. 

Hayashi  Gonsuke,  (Seal) 

Envoy  Extraordinary  and  Minister  Plenipotentiary. 

The  23rd  day  of  the  2nd  month  of  the  fifth  year  of  Meiji. 

Major-General  Ye  Tchi-yong,  (Seal) 
Minister  of  State  for  Foreign  Affairs  ad  interim. 

The  23rd  day  of  the  2nd  month  of  the  8th  year  of 
Kwang-mu. 

B. 

Agreement  Between  Japan  and  Korea,  Signed  August  22, 
1904,  Relating  to  the  Financial  and  Diplomatic 
Advisers. 

Article  I.  The  Korean  Government  shall  engage  a finan- 
cial adviser  to  the  Korean  Government  a Japanese  subject 
commended  by  the  Japanese  Government,  and  all  matters 
concerning  finances  shall  be  dealt  with  after  his  counsel 
has  been  taken. 


23 


Article  II.  The  Korean  Government  shall  engage  a dip- 
lomatic adviser  to  the  Department  of  Foreign  Affairs  a 
foreigner  commended  by  the  Japanese  Government,  and 
all  important  matters  concerning  foreign  relations  shall 
be  dealt  with  after  his  counsel  has  been  taken. 

Article  III.  The  Korean  Government  shall  previously 
consult  the  Japanese  Government  in  concluding  treaties 
and  conventions  with  foreign  powers,  and  in  dealing  with 
other  important  diplomatic  affairs,  such  as  the  grant  of 
concessions  to  or  contracts  with  foreigners. 

Hayashi  Gonsuke,  (Seal) 

Envoy  Extraordinary  and  Minister  Plenipotentiary. 

The  22nd  day  of  the  8th  month  of  the  37th  year  of  Meiji. 

Yun  Chi-no,  (Seal) 

Acting  Minister  of  State  for  Foreign  Affairs. 

The  22nd  day  of  the  8th  month  of  the  8th  year  of 
Kwang-mu. 

C. 

Agreement  Between  Japan  and  Korea,  Signed  April  1, 
1905,  Regarding  Communications  Services. 

The  Imperial  Government  of  Japan  and  Korea  finding 
it  expedient  from  the  standpoint  of  the  administration  and 
finances,  of  Korea,  to  rearrange  the  system  of  communica- 
tions in  that  country,  and,  by  amalgamating  it  with  that 
of  Japan,  to  unite  the  two  systems  into  one  common  to  the 
two  countries,  and  having  seen  the  necessity,  with  that 
object  in  view,  of  transferring  the  post,  telegraph  and 
telephone  services  of  Korea  to  the  Japanese  Government, 
Hayashi  Gonsuke,  Envoy  Extraordinary  and  Minister 
Plenipotentiary  of  Japan,  and  I.  Ha-Yong,  Minister  of 
State  for  Foreign  Affairs  of  Korea,  each  invested  with 
proper  authority,  have  agreed  upon  and  concluded  the 
following  articles : 

Article  I.  The  Imperial  Government  of  Korea  shall 
transfer  and  assign  the  control  and  administration  of  the 
post  telegraph  and  telephone  services  in  Korea  (except 
the  telephone  service  exclusively  pertaining  to  the  De- 


24 


partment  of  the  Imperial  Household)  to  the  Imperial  Jap- 
anese Government. 

Article  II.  The  land,  buildings,  furnitures,  instruments, 
machines  and  all  other  appliances  connected  with  the  sys- 
tem of  communications  already  established  by  the  Im- 
perial Government  of  Korea,  shall,  by  virtue  of  the  present 
Agreement,  be  transferred  to  the  control  of  the  Imperial 
Japanese  Government. 

The  authorities  of  the  two  countries  acting  together 
shall  make  an  inventory  of  the  land,  buildings,  and  all  other 
requisites  mentioned  in  the  preceding  paragraph,  which 
inventory  shall  serve  as  evidence  in  the  future. 

Article  III.  When  it  is  deemed  necessary  by  the  Jap- 
anese Government  to  extend  the  communications  system 
in  Korea,  they  may  appropriate  land  and  buildings  belong- 
ing to  the  State,  or  to  private  persons;  the  former  without 
compensation  and  the  latter  with  proper  indemnification. 

Article  IV.  In  respect  of  the  control  of  the  communica- 
tions service  and  the  custody  of  the  properties  in  connec- 
tion therewith,  the  Japanese  Government  assume  on  their 
own  account,  the  responsibility  of  good  administration. 

The  expense  required  in  the  extension  of  the  communi- 
cations service  shall  be  borne  by  the  Imperial  Government 
of  Japan. 

The  Imperial  Government  of  Japan  shall  officially  notify 
the  Imperial  Government  of  Korea  of  the  financial  condi- 
tion of  the  system  of  communications  under  their  control. 

Article  V.  All  appliances  and  materials  which  are 
deemed  necessary  by  the  Imperial  Government  of  Japan 
for  the  control  or  the  extension  of  the  system  of  com- 
munications shall  be  exempt  from  all  duties  and  imposts. 

Article  VI.  The  Imperial  Government  of  Korea  shall 
be  at  liberty  to  maintain  the  present  Board  of  Communica- 
tions so  far  as  such  retention  does  not  interfere  with  the 
control  and  extension  of  the  service  by  the  Japanese  Gov- 
ernment. 

The  Japanese  Government,  in  controlling  and  extending 


25 


the  services,  shall  engage  as  many  Korean  officials  and 
employees  as  possible. 

Article  VII.  In  respect  of  the  arrangement  formerly 
entered  into  by  the  Korean  Government  with  the  govern- 
ments of  foreign  Powers,  concerning  the  post,  telegraph 
or  telephone  services,  the  Japanese  Government  shall  in 
behalf  of  Korea,  exercise  the  rights  and  oerform  the  obli- 
gations pertaining  thereto. 

Should  there  arise  in  the  future  any  necessity  for  con- 
cluding any  new  convention  between  the  Government  of 
Korea  and  the  governments  of  foreign  Powers  concerning 
the  communications  services,  the  Japanese  Government 
shall  assume  the  responsibility  of  concluding  such  conven- 
tion in  behalf  of  the  Korean  Government. 

Article  VIII.  The  various  conventions  and  agreements 
respecting  the  communications  service  hitherto  existing 
between  the  Governments  of  Japan  and  Korea  are  mutually 
abolished  or  modified  by  the  present  agreement. 

Article  IX.  When  in  the  future  as  a result  of  the  gen- 
eral development  of  the  communications  service  in  Korea, 
there  is  some  adequate  profit  over  and  above  expenditures, 
defrayed  by  the  Japanese  Government  for  the  control  and 
maintenance  of  the  old  services  and  for  their  extensions 
and  improvements,  the  Japanese  Government  shall  deliver 
to  the  Korean  Government  a suitable  nercentage  of  such 
profit. 

Article  X.  When  in  the  future  an  ample  surplus  exists 
in  the  finances  of  the  Korean  Government  the  control  of 
their  communications  service  may  be  returned  to  the  Gov- 
ernment of  Korea,  in  the  sequel  of  consultation  between 
the  Governments. 

Hayashi  Gonsuke,  (Seal) 

Envoy  Extraordinary  and  Minister  Plenipotentiary. 

The  1st  day  of  the  4th  month  of  the  38th  year  of  Meiji. 

I.  Hay-yeng,  (Seal) 
Minister  of  State  for  Foreign  Affairs.' 

The  1st  day  of  the  4th  month  of  the  9th  year  of 
Kwang-mu. 


26 


D. 

Agreement  Respecting  the  Coast  Trade  of  Korea. 

The  Imperial  Governments  of  Japan  and  Korea,  deem- 
ing it  necessary,  for  the  purpose  of  improving  the  trade 
and  promoting  the  development  of  the  resources  of  Korea, 
to  allow  navigation  by  Japanese  vessels  along  the  coasts 
and  in  the  inland  waters  of  Korea,  Hayashi  Gonsuke, 
Envoy  Extraordinary  and  Minister  Plenipotentiary  of 
Japan,  and  I.  Ha-Yeng,  Minister  of  State  for  Foreign 
Affairs  of  Korea,  duly  authorized  by  their  respective  gov- 
ernments for  the  purpose,  have  agreed  upon  the  following 
articles : 

Article  I.  Japanese  vessels  shall  be  at  liberty  to 
navigate  along  the  coasts,  and  in  the  inland  waters  of 
Korea,  for  the  purpose  of  trade  in  accordance  with  the 
stipulations  of  the  present  agreement,  which,  however, 
shall  not  be  applicable  to  navigation  between  the  open 
ports. 

Article  II.  Licenses  shall  be  obtained  tor  all  Japanese 
vessels  to  be  employed  in  navigation  of  the  coasts  and 
inland  waters,  upon  reporting  through  the  Japanese  Con- 
sular Officers  to  the  Korean  Customs  the  names  and  resi- 
dences of  the  owners,  the  names,  type  and  carrying  capac- 
ity of  the  vessels,  as  well  as  the  limits  within  which  such 
vessels  are  to  navigate. 

Licenses  shall  be  available  for  one  year  from  the  date 
of  their  issue. 

Article  III.  Upon  receipt  of  a license,  tees  shall  be  paid 
to  the  Korean  Customs  according  to  the  following  rates: 


For  a .vessel  of  foreign  type  below  100  tons 15.00 

For  a vessel  of  Japanese  type 15.00 

For  a vessel  of  foreign  type  above  100  and  below 

500  tons  50.00 

For  a vessel  of  foreign  type  above  500  and  below 

1,000  tons  100.00 

For  a vessel  of  foreign  type  above  1,000  tons 150.00 


Article  IV.  Japanese  vessels  may  freely  navigate  within 
the  limits  specified,  but  shall  not  proceed  to  any  place  not 


27 


in  Korean  territory,  except  in  case  of  stress  of  weather 
or  other  emergency,  or  in  case  special  permission  has  been 
obtained  from  the  Korean  Customs. 

Article  V.  The  licenses  shall  be  carried  on  board  the 
vessels  during  their  voyages,  and  shall  be  shown  whenever 
requested  by  the  Korean  Customs  or  by  local  officials  of 
Korea  or  by  chiefs  of  villages  duly  authorized  by  such  local 
official. 

Article  VI.  Japanese  shipowners  shall  have  liberty  to 
lease  land  for  the  purpose  of  building  warehouses  at  the 
places  where  their  vessels  call. 

Such  owners  may  also  construct  piers  or  wharves  on  the 
banks  and  coasts  with  the  permission  of  the  Korean 
Customs. 

Article  VII.  In  case  of  infraction  of  the  present  agree- 
ment by  a Japanese  vessel,  the  Korean  Customs  may  cause 
the  license  of  such  vessel  to  be  confiscated,  or  may  refuse 
to  issue  a new  one,  if  the  offience  be  found  upon  examina- 
tion, to  be  of  a grave  nature. 

Article  VIII.  When  a Japanese  vessel  or  the  crew  there- 
of, infringes  the  stipulations  of  the  present  agreement  or 
of  other  treaties,  or  when  a member  of  the  crew  commits 
any  crime,  the  Japanese  Consular  Offices  shall  deal  with 
the  case  in  accordance  with  the  provisions  of  the  treaties 
and  the  laws  of  Japan. 

Article  IX.  The  present  agreement  shall  remain  in  force 
for  a period  of  fifteen  years  from  the  date  of  its  signature, 
and  after  the  expiration  of  each  period,  further  arrange- 
ments may  be  made  by  mutual  agreement. 

The  two  Governments  may,  however,  conclude  an  agree- 
ment by  mutual  consent,  even  before  the  expiration  of  the 
aforesaid  term,  when  in  future  the  navigation  of  Korea 
shall  be  further  developed. 

Hayashi  Gonsuke,  (Seal) 

Envoy  Extraordinary  and  Minister  Plenipotentiary. 

The  13th  day  of  the  8th  month  of  the  83rd  year  of  Meiji. 

I.  Ha-yeng,  (Seal) 
Minister  of  State  for  Foreign  Affairs. 

The  13th  day  of  the  8th  month  of  the  9th  year  of 
Kwang-mu. 


23 


E. 

Declaration  of  the  Japanese  Government. 

November  22,  1905. 

The  relations  of  propinquity  have  made  it  necessary  for 
Japan  to  take  and  exercise,  for  reasons  closely  connected 
with  her  own  safety  and  repose,  a paramount  interest  and 
influence  in  the  political  and  military  affairs  of  Korea. 
The  measures  hitherto  taken  have  been  purely  advisory, 
but  the  experience  of  recent  years  has  demonstrated  the 
insufficiency  of  measures  of  guidance  alone.  The  unwise 
and  improvident  action  of  Korea,  more  especially  in  the 
domain  of  her  international  concerns,  has  in  the  past  been 
the  most  fruitful  source  of  complications.  To  permit  the 
present  unsatisfactory  condition  of  things  to  continue 
unrestrained  and  unregulated  would  be  to  invite  fresh  diffi- 
culties, and  Japan  believes  that  she  owes  it  to  herself  and 
to  her  desire  for  the  general  pacification  of  the  extreme 
East  to  take  the  steps  necessary  to  put  an  end  once  and 
for  all  to  this  dangerous  situation.  Accordingly,  with  that 
object  in  view  and  in  order  at  the  same  time  to  safeguard 
their  own  position  and  to  promote  the  well-being  of  the 
Government  and  people  of  Korea,  the  Imperial  Govern- 
ment have  resolved  to  assume  a more  intimate  and  direct 
influence  and  responsibility  than  heretofore  in  the  external 
relations  of  the  Peninsula.  The  Government  of  His 
Majesty  the  Emperor  of  Korea  are  in  accord  with  the  Im- 
perial Government  as  to  the  absolute  necessity  of  the 
measure,  and  the  two  governments,  in  order  to  provide  for 
the  peaceful  and  amicable  establishment  of  the  new  order 
of  things,  have  concluded  the  accompanying  compact.  In 
bringing  this  agreement  to  the  notice  of  the  Powers  having 
treaties  with  Korea,  the  Imperial  Government  declare  that 
in  assuming  charge  of  the  foreign  relations  of  Korea  and 
undertaking  the  duty  of  watching  over  the  execution  of 
the  existing  treaties  of  that  country,  they  will  see  that 
those  treaties  are  maintained  and  respected,  and  they  also 
engage  not  to  prejudice  in  any  way  the  legitimate  com- 
mercial and  industrial  interests  of  those  Powers  in  Korea. 


29 


F. 

The  Law  Relating  to  the  Toyo  Takushoku  Kabushiki 

Kaisha. 

(Oriental  Development  Company,  Limited.  Promulgated 
on  August  26th,  1908,  by  Law  No.  63.) 

Chapter  I.  General  Provisions. 

Article  I.  The  Oriental  Development  Company  shall  be 
a joint-stock  company  the  object  of  which  is  to  engage  in 
exploitation  enterprise  in  Korea,  and  shall  have  its  head 
office  in  Seoul. 

Article  II.  The  capital  of  the  Oriental  Development 
Company  shall  be  ten  million  yen  (Y.  10,000,000),  but  it 
may  be  increased  on  the  approval  of  the  Government. 

Article  III.  The  shares  of  the  Oriental  Development 
Company  shall  all  bear  the  name  of  holders  and  may  be 
owned  exclusively  by  Japanese  and  Korean  subjects. 

Article  IV.  The  payment  of  the  entire  amount  of  shares 
shall  not  be  a prerequisite  for  an  increase  in  the  capital 
of  the  Oriental  Development  Company. 

Article  V.  The  term  of  existence  of  the  Oriental  De- 
velopment Company  shall  be  one  hundred  years,  counting 
from  the  date  of  registration  of  its  organization,  but  it 
may  be  prolonged  subject  to  the  approval  of  the  Govern- 
ment. 

Article  VI.  The  Oriental  Development  Company  may, 
upon  approval  of  the  Government,  establish  branch  offices 
or  agencies  in  Tokyo  and  elsewhere. 

Chapter  II.  Officers. 

Article  VII.  The  Oriental  Development  Company  shall 
have  one  President,  two  Vice-Presidents,  four  or  more 
Directors,  and  three  or  more  Auditors. 

Article  VIII.  The  President  shall  represent  the  Oriental 
Development  Company  and  have  general  control  of  its 
business  affairs. 

The  \rice-Presidents  shall  represent  the  President  in 


30 


case  the  latter  is  prevented  from  discharging  his  official 
duties  and  shall  act  as  President  in  case  that  office  is  left 
vacant. 

The  Vice-Presidents  and  the  Directors  shall  assist  the 
President,  and  respectively  take  charge  of  a specified  part 
of  the  business  affairs  of  the  Company. 

The  Auditors  shall  inspect  the  business  affairs  of  the 
Company. 

Article  5X.  The  President  shall  be  a Japanese  subject 
and  shall  be  appointed  by  the  Japanese  Government. 

Of  the  Vice-Presidents,  one  shall  be  a Japanese  subject 
and  the  other  a Korean  subject. 

At  least  two-thirds  of  the  Directors  and  Inspectors 
shall  be  Japanese  subjects  and  the  rest  shall  be  Korean 
subjects. 

Of  the  Vice-Presidents  and  Directors,  Japanese  subjects 
shall  be  appointed  by  the  Japanese  Government,  and 
Korean  subjects  by  the  Korean  Government.  However, 
in  case  of  the  appointment  of  Directors,  a General  Meeting 
of  Shareholders  shall  be  caused  to  elect  candidates,  twice 
the  number  to  be  appointed,  from  among  the  shareholders 
possessing  fifty  or  more  shares. 

The  Auditors  shall  be  elected  at  a General  Meeting  of 
Shareholders  from  among  Shareholders  possessing  thirty 
or  more  shares. 

The  term  of  office  of  the  President,  Vice-Presidents  and 
Directors  shall  be  five  years,  and  the  term  of  office  of  the 
Auditors  shall  be  two  years. 

Article  X.  The  President,  Vice-Presidents,  and  Direc- 
tors shall  not  engage  in  any  other  occupation  or  business; 
but  this  provision  shall  not  be  applicable  when  permission 
of  the  Government  shall  have  been  obtained. 

Chapter  III.  Business  of  the  Company. 

Article  XI.  The  Oriental  Development  Company  shall 
engage  in  the  following  lines  of  business: 

1.  Agriculture. 


31 


2.  Sale,  purchase,  lease,  and  lending  of  land  necessary 
for  development ; 

3.  Undertakings  connected  with  land  and  its  control 
necessary  for  development ; 

4.  Constructing,  selling,  buying,  renting,  and  lending  of 
buildings  necessary  for  development; 

5.  Collection  and  distribution  of  Japanese  and  Korean 
settlers ; 

6.  Furnishing  settlers  and  Korean  farmers  with  articles 
necessary  for  exploitation  and  the  distribution  of  articles 
produced  or  acquired  by  them ; 

7.  Supplying  funds  necessary  for  development. 

Article  XII.  The  Oriental  Development  Company  may, 

upon  approval  of  the  Government,  engage  in  Korea,  as  ac- 
cessory to  the  main  business,  in  marine  industries  or  any 
other  enterprise  necessary  for  development. 

Article  XIII.  The  supplying  of  funds  mentioned  in  the 
7th  item  of  Article  XI  shall  be  effected  according  to  the 
following  methods: 

1.  Loans  to  Japanese  and  Korean  settlers  for  defraying 
the  expenses  of  settling,  which  are  to  be  reimbursed  in 
annual  installments  within  twenty-five  years; 

2.  Loans  to  settlers  and  Korean  farmers  on  the  mort- 
gage of  immovable  properties  in  Korea,  which  are  to  be 
reimbursed  in  annual  installments  within  fifteen  years; 

3.  Loans  to  settlers  and  Korean  farmers  on  the  mort- 
gage of  immovable  properties  in  Korea,  which  are  to  be 
reimbursed  at  specified  times  within  five  years; 

4.  Loans  to  settlers  and  Korean  farmers  on  the  security 
of  articles  produced  or  acquired  by  them ; 

5.  Loans  on  the  mortgage  of  immovable  properties  in 
Korea,  which  are  to  be  reimbursed  at  specified  times  within 
three  years. 

In  regard  to  the  loans  mentioned  in  Item  1 of  the  pre- 
ceding paragraph,  the  methods  and  terms  thereof  shall  be 
determined  in  advance  and  the  approval  of  the  government 
shall  be  obtained. 

The  total  amount  of  loans  mentioned  in  Items  2-5  of 


32 


the  above  paragraph  shall  not  exceed  one-fifth  of  the  total 
of  the  paid-up  capital  and  unredeemed  loans  of  the  com- 
pany. 

Article  XIV.  The  amount  of  loans  on  the  security  of 
immovable  or  movable  properties  shall  not  exceed  two- 
thirds  of  the  value  appraised  by  the  Oriental  Development 
Company.  However  this  provision  shall  not  be  applicable 
to  loans  mentioned  in  Item  1,  Paragraph  1,  of  the  preced- 
ing article. 

Article  XV.  Loans  on  the  security  of  immovable  prop- 
erties must  be  first  mortgages. 

Article  XVI.  For  loans  to  be  reimbursed  in  annual  in- 
stallments, the  first  five  years  shall  be  specified  as  the 
period  during  which  no  redemption  shall  be  made. 

Article  XVII.  The  principal  and  the  interest  thereon 
shall  be  included  in  annual  installments,  and  equal  amounts 
shall  be  specified  to  be  redeemed  each  year;  but  this  pro- 
vision shall  not  be  applicable  to  the  interest  for  the  period 
during  which  no  redemption  shall  be  made. 

Article  XVIII.  A debtor  whose  loan  contract  provides 
for  redemption  in  annual  installments  may  redeem  the 
whole  or  a part  of  the  loan  prior  to  the  expiration  of  the 
term  of  redemption. 

In  the  case  mentioned  in  the  preceding  paragraph,  the 
Oriental  Development  Company  may  demand  proper  fees 
according  to  the  rates  specified  in  the  Regulations  of  the 
company. 

Article  XIX.  In  the  following  cases  the  redemption  of 
the  whole  of  a loan  may  be  demanded  even  prior  to  the 
expiration  of  the  term  of  redemption: 

1.  When  a loan  is  employed  by  the  debtor  for  any  pur- 
pose other  than  that  for  which  loans  were  created. 

2.  When  a debtor  has  delayed  the  payment  of  annual 
installments  and  has  failed  to  make  payment  even  after 
receipt  of  a demand  for  payment; 

3.  When  the  whole  or  a part  of  immovable  properties 
held  as  security  has  been  appropriated  for  public  use. 
However,  this  provision  shall  not  be  applicable  when  the 


33 


debtor  has  furnished  money  covering  the  appropriated  se- 
curity or  has  supplemented  the  security  with  other  ade- 
quate immovable  properties. 

If  the  appropriation  is  partial  in  the  case  mentioned  in 
Item  3 of  the  preceding  paragraph,  the  demand  for  re- 
demption shall  be  proportioned  to  the  amount  appropri- 
ated. 

Article  XX.  When  the  value  of  security  has  fallen  to 
such  an  extent  that  with  reference  to  the  balance  of  a 
loan  a deficit  has  been  caused  in  the  proportion  mentioned 
in  Article  XIV,  a demand  may  be  made  for  additional  se- 
curities or  for  the  redemption  of  a part  of  the  loan  cor- 
responding to  the  said  deficit. 

When  a debtor  has  not  complied  with  the  demand  men- 
tioned in  the  preceding  paragraph  the  redemption  of  the 
whole  of  a loan  may  be  demanded  even  prior  to  the  expira- 
tion of  the  term  of  redemption. 

Article  XXI.  Any  surplus  of  money  remaining  on  ac- 
count of  business  shall  not  be  used  for  any  other  purpose 
than  to  invest  temporarily  in  national  loan  bonds  or  bills, 
or  to  deposit  with  a bank  which  may  be  designated  by 
the  government. 

Article  XXII.  The  Oriental  Development  Company 
may,  if  necessary  on  account  of  business,  contract  a loan 
upon  the  approval  of  the  government. 

Chapter  IV.  Debentures  of  the  Oriental  Development 

Company. 

Article  XXIII.  Debentures  may  be  issued  by  the  Ori- 
ental Development  Company  to  the  extent  of  ten  times 
the  capital. 

When  the  Oriental  Development  Company  issues  deben- 
tures the  provisions  of  Article  199  of  the  Commercial  Code 
shall  not  be  applicable. 

Article  XXIV.  Whenever  there  is  a desire  for  issuing 
debentures  by  the  Oriental  Development  Company,  the 
amount  and  term  of  the  same,  as  well  as  the  method  of 


34 


issue  and  redemption,  shall  be  specified  and  the  approval 
of  the  Government  thereto  shall  be  obtained. 

Article  XXV.  When  debentures  are  to  be  issued  by  the 
Oriental  Development  Company,  payment  may  be  made 
in  several  installments. 

Article  XXVI.  The  debentures  issued  by  the  Oriental 
Development  Company  shall  be  unregistered  after  the 
whole  amount  has  been  paid  up. 

Article  XXVII.  Owners  of  debentures  issued  by  the 
Oriental  Development  Company  shall  have,  with  reference 
to  the  properties  of  the  Oriental  Development  Company, 
the  right  to  have  their  claims  paid  prior  to  those  of  any 
other  creditors. 

Article  XVIII.  The  Oriental  Development  Company, 
in  order  to  renew  debentures,  may  issue  new  debentures 
without  observing  for  the  time  being  the  restrictions  men- 
tioned in  Article  23.  However,  in  this  case  the  old  deben- 
tures corresponding  to  the  total  amount  of  the  new  deben- 
tures shall  be  redeemed  within  one  month  after  the  issu- 
ance of  the  new  debentures. 

Article  XXIX.  Debentures  issued  by  the  Oriental  De- 
velopment Company  shall  remain  unredeemed  for  five 
years,  and  shall  be  redeemed  within  thirty  years. 

Article  XXX.  The  Oriental  Development  Company 
may,  upon  approval  of  the  government,  purchase  and  can- 
cel its  debentures. 

Chapter  V.  Reserve  Fund. 

Article  XXXI.  At  each  business  period  the  Oriental 
Development  Company  shall  lay  by  as  a reserve  fund  eight- 
hundredths  (8-100)  or  more  of  the  profits  in  order  to  pro- 
vide for  any  deficit  in  the  capital  stock,  and  shall  also  lay 
by  two-hundredths  (2-100)  or  more  of  the  profits  in  order 
to  equalize  dividends. 

Article  XXXII.  The  government  shall  supervise  the 
business  affairs  of  the  Oriental  Development  Company. 


35 


Chapter  VI.  Supervision  and  Aid  of  the  Government. 

Article  XXXIII.  The  government  shall  appoint  the 
Supervisors  of  the  Oriental  Development  Company  and 
shall  cause  them  to  supervise  the  business  affairs  of  the 
Oriental  Development  Company  in  co-operation  with  the 
supervisors  appointed  by  the  Korean  Government. 

The  Supervisors  of  the  Oriental  Development  Company 
may  at  any  time  inspect  the  safes,  books,  documents,  and 
other  articles  of  the  company. 

The  Supervisors  of  the  Oriental  Development  Company 
should  they  deem  it  necessary,  may  at  any  time  order  the 
officers  to  report  on  the  various  business  accounts  and  the 
condition  of  business  affairs. 

The  Supervisors  of  the  Oriental  Development  Company 
may  be  present  at  a general  meeting  of  shareholders,  or 
at  any  other  meeting,  and  may  state  their  views. 

ARTICLE  XXXIV.  The  government  may  issue  any 
order  that  may  be  deemed  necessary  for  supervising  the 
Oriental  Development  Company. 

Article  XXXV.  Should  any  resolution  of  the  Oriental 
Development  Company  or  the  acts  of  its  officers  not  con- 
form to  the  laws  and  ordinances  or  the  regulations  of  the 
company,  or  be  deemed  detrimental  to  public  interest,  the 
government  may  cancel  the  said  resolution  or  discharge 
the  officers  concerned.  When  any  officer  of  the  Oriental 
Development  Company  has  failed  to  execute  matters 
ordered  by  the  authorities  supervising  the  company,  he 
shall  be  similarly  dealt  with. 

Article  XXXVI.  The  Oriental  Development  Company 
shall  not  dispose  of  its  profits  without  obtaining  the  ap- 
proval of  the  government. 

Article  XXXVII.  V hen  the  Oriental  Development 
Company  determines  Regulations  relating  to  immigration 
or  any  other  provisions,  it  shall  obtain  the  approval  of  the 
government. 

Article  XXXVIII.  When  the  Oriental  Development 
Company  desires  to  alter  matters  already  approved  by  the 


government,  the  further  approval  of  the  government  shall 
be  obtained. 

Article  XXXIX.  The  government  shall  grant  to  the 
Oriental  Development  Company  a subsidy  in  each  business 
year  at  the  rate  of  three  hundred  thousand  yen  per  annum 
for  a period  of  eight  years  commencing  from  the  date  of 
the  registration  of  the  company’s  establishment.  When, 
however,  the  rate  of  dividend  for  any  business  year  ex- 
ceeds eight  per  cent  per  annum  of  the  paid-up  capital,  the 
amount  corresponding  to  the  excess  shall  be  deducted 
from  the  subsidy. 

Article  XL.  When  the  rate  of  dividend  exceeds  ten  per 
cent  per  annum  of  the  paid-up  capital,  the  amount  of  excess 
shall  be  applied  for  the  reimbursement  of  the  subsidy  men- 
tioned in  the  preceding  article. 

When  the  reimbursement  mentioned  in  the  preceding 
paragraph  has  been  completed,  one-half  of  the  amount  of 
the  excess  referred  to  shall  be  laid  by  as  a special  reserve 
fund. 


Chapter  VII.  Penal  Provisions. 

Article  XLI.  When  any  of  the  following  offenses  have 
been  committed  on  the  part  of  the  Oriental  Development 
Company,  the  President  or  the  Vice-Presidents  acting  as 
or  representing  the  President  shall  be  liable  to  a fine  of 
not  less  than  one  hundred  yen  and  not  exceeding  one 
thousand  yen.  If  the  offense  relates  to  matters  divided 
into  different  parts  and  taken  charge  of  by  the  Vice-Presi- 
dents or  the  Directors,  the  Vice-Presidents  or  the  Direc- 
tors concerned  shall  be  liable  to  a fine  of  a similar  amount: 

1.  When  the  approval  of  the  government  which  should 
be  obtained  according  to  the  provisions  of  this  law  has 
not  been  obtained. 

2.  When  business  is  engaged  in  without  observing  the 
provisions  of  Article  11. 

3.  When  funds  have  been  furnished  in  contravention  of 
the  provisions  of  Articles  13-17. 


37 


4.  When  a surplus  of  the  business  account  has  been  used 
in  contravention  of  the  provisions  of  Article  21. 

5.  When  the  debentures  of  the  Oriental  Development 
Company  have  been  issued  in  contravention  of  the  pro- 
visions of  Article  23;  provided  that  this  provision  shall 
not  be  applicable  to  the  case  mentioned  in  Articles  28. 

6.  When  the  debentures  issued  by  the  Oriental  Develop- 
ment Company  have  not  been  redeemed,  in  contravention 
of  the  provisions  of  Article  28. 

7.  When  the  profits  have  been  disposed  of  in  contra- 
vention of  the  provisions  of  Articles  31  and  40. 

Article  XLII.  When  the  President,  Vice-Presidents  or 
Directors  of  the  Oriental  Development  Company  have 
acted  in  contravention  of  the  provisions  of  Article  10  they 
shall  be  liable  to  a fine  of  not  less  than  twenty  yen  and 
not  exceeding  two  hundred  yen. 

Article  XLIII.  The  provisions  of  Article  206-208  of  the 
law  relating  to  the  procedure  of  non-contentious  cases 
shall  be  applicable  to  the  fines  provided  for  in  the  two  fore- 
going articles. 


Supplementary  Articles. 

Article  XLIV.  The  government  shall  appoint  an  Or- 
ganizing Commission,  which  shall  be  caused  to  conduct, 
in  co-operation  with  the  Organizing  Commission  appoint- 
ed by  the  Korean  Government,  all  business  connected  with 
the  organization  of  the  Oriental  Development  Company. 

Article  XLV.  The  Organizing  Commission  shall  draw 
up  the  Regulations  of  the  Company,  and  after  obtaining 
the  approval  of  the  government  shall  call  for  subscriptions 
for  the  shares. 

Article  XLVI.  When  the  subscription  for  the  shares 
has  been  completed,  the  Organizing  Commission  shall  pre- 
sent to  the  government  the  roll  of  applications  and  apply 
for  approval  to  organize  the  Oriental  Development  Com- 
pany. 

Article  XLVII.  When  the  approval  to  organize  the  com- 


38 


pany  has  been  obtained,  the  Organizing  Commission  shall 
without  delay  call  for  the  first  payment  on  all  shares. 

When  the  payment  mentioned  in  the  preceding  para- 
graph has  been  made,  the  Organizing  Commission  shall 
call  a General  Organizing  Meeting. 

Article  XLVIII.  When  the  General  Organizing  Meet- 
ing has  been  closed,  the  Organizing  Commission  shall  turn 
over  its  business  to  the  President  of  the  Oriental  Develop- 
ment Company. 

Article  XLIX.  The  Directors  and  Auditors  for  the  first 
term  shall  be  appointed  without  election  at  a General  Meet- 
ing of  Shareholders.  In  all  other  matters  the  rules  of 
Article  9 shall  be  followed. 


G. 

Agreement  Between  the  Governments  of  Japan  and  Korea 
Concerning  the  Management  of  the  Forests  in  the 
Districts  Along  the  Yalu  and  the  Tumen. 

The  Governments  of  Japan  and  Korea,  regarding  the 
forests  in  the  districts  along  the  Yalu  and  Tumen  rivers 
to  be  the  richest  source  of  timber  on  the  Korean  frontier, 
hereby  agree  on  the  terms  mentioned  below  as  to  the  man- 
agement of  those  forests: 

Article  1.  The  forests  in  the  districts  along  the  Yalu  and 
Tumen  rivers  shall  be  under  the  joint  management  of  the 
Governments  of  Japan  and  Korea. 

Article  2.  The  fund  for  the  management  shall  be  yen 
1,200,000,  one-half  of  which  shall  be  invested  by  each  gov- 
ernment, respectively. 

Article  3.  As  to  the  management  of  the  forests  and  the 
income  and  expenditure,  a special  account  shall  be  created 
in  order  to  make  them  clear. 

The  details  of  the  account  shall  be  notified  to  each  gov- 
ernment once  a year. 

Article  4.  The  profit  or  loss  of  the  undertaking  shall  be 
divided  between  the  two  governments  in  proportion  to 
the  amounts  of  their  investments. 


39 


Article  5.  In  case  necessity  arises  to  increase  the  invest- 
ment stated  in  Article  2,  it  shall  be  done  with  the  approval 
of  both  governments. 

Article  6.  In  case  necessity  arises  to  enact  detailed  rules 
in  order  to  enforce  the  present  agreement,  the  duty  of  com- 
piling such  rules  shall  be  submitted  to  the  hands  of  the 
commissioners  appointed  by  both  governments. 

Article  7.  If,  as  the  enterprise  progresses,  a necessity 
arises  to  change  its  organization  into  a company,  so  as  to 
enable  the  subjects  of  both  the  countries  to  join  the  under- 
taking, the  required  process  shall  be  fixed  by  agreement 
between  both  governments. 

Hirobumi  Ito  (signed) 

Resident  General  of  the  Empire  of  Japan. 

Pak  Che-soon  (signed) 

Prime  Minister  of  the  Empire  of  Korea. 

Min  Yung-Ko  (signed) 

Minister  of  State  for  Financial  Affairs  of  the  Empire  of 
Korea. 

Kwan  Cheung-hyen  (signed) 

Minister  of  State  for  Agricultural,  Commercial  and  In- 
dustrial Affairs  of  the  Empire  of  Korea. 

The  19th  day  of  October,  1900. 

H. 

Memorandum  Concerning  the  Central  Bank  in  Korea. 

The  Government  of  Japan  and  Korea  has  agreed  upon 
the  following  stipulation  concerning  the  establishment  of 
the  Bank  of  Korea. 

Article  I.  The  Government  of  Korea  shall  establish  the 
Bank  of  Korea.  The  government  shall  grant  the  bank 
authority  to  issue  convertible  bank  notes,  and  cause  it  to 
perform  such  functions  as  pertain  to  the  central  financial 
medium  in  Korea,  and  to  deal  in  addition  with  the  money 
of  the  Japanese  Treasury,  if  so  requested  by  the  Bank  of 
Japan. 

Article  II.  The  bank  notes  issued  by  the  Dili  Ichi  Ginko 


40 


Joint  Stock  Company,  shall  be  regarded  as  those  issued  by 
the  Bank  of  Korea,  and  the  latter  shall  take  over  the  re- 
sponsibility of  redeeming  such  bank  notes. 

Article  III.  The  shares  of  the  Bank  of  Korea  shall  be 
owned  by  Japanese  and  Koreans. 

Article  IV.  The  principal  officers  of  the  Bank  of  Korea 
shall  for  the  time  being,  be  appointed  from  among  Jap- 
anese. 

Article  V.  The  Bank  of  Korea  shall  not  be  required  to 
pay  any  dividend  on  the  shares  owned  by  the  Government 
of  Korea,  until  the  dividend  on  the  shares  other  than  those 
owned  by  the  said  government  shall  reach  six  per  cent  per 
annum. 

Article  VI.  The  Government  of  Korea  shall  guarantee 
for  a period  of  five  years  after  the  establishment  of  the 
Bank  of  Korea,  a dividend  of  six  per  cent  per  annum  on  the 
shares  other  than  those  owned  by  the  Government  of 
Korea. 

In  witness  whereof  the  undersigned  have  signed  and 
sealed  and  exchanged  the  present  memorandum  drawn  up 
in  duplicate  both  in  the  Japanese  and  Korean  languages. 

July  26th,  42nd  year  of  Meizi. 

(Signed.)  Viscount  Arasuke  Sone, 

H.  I.  J.  M.’s  Resident  General. 

(Signed.)  Yi  Wan-Yong, 

H.  I.  K.  M.’s  Prime  Minister. 


Note : 

The  reader  will  no  doubt  observe  the  following  differ- 
ences between  the  original  treaty  or  agreement  for  the 
establishment  of  the  bank,  just  shown  as  “H”  and  the  final 
charter  which  follows  as  “I”  : 

The  treaty  provided  that  the  stock  could  be  owned  by 
both  Japanese  and  Koreans,  while  the  charter  provides 
that  only  Japanese  may  become  stockholders. 

The  treaty  provided  that  the  government-owned  part 
of  the  bank  shares  should  belong  to  Korea,  and  the  charter 
provides  that  this  government  ownership  shall  be  in  Japan. 


41 


The  charter  when  granted  can  hardly  be  recognized  in 
any  respect  as  being  consistent  or  relating  to  the  mem- 
orandum treaty. 


APPENDIX. 

I. 

Extracts  From  the  Law  Relating  to  the  Bank  of  Chosen. 

(Law  No.  48,  Promulgated  March  1,  1911.) 

Chapter  I.  General  Provisions. 

Article  1.  The  Chosen  Ginko  or  the  Bank  of  Chosen 
shall  be  a joint  stock  company  with  its  head  office  at  Keijo 
(Seoul),  Chosen. 

Article  2.  The  bank  is  authorized  to  establish  branches 
or  agencies,  or  to  open  correspondence  with  other  banks, 
with  the  sanction  of  the  Governor-General  of  Chosen. 

The  Governor-General  of  Chosen  may  order  the  bank 
to  establish  branches  and  agencies  when  deeming  it  nec- 
essary. 

Article  3.  The  duration  of  the  bank  shall  be  fifty  years 
from  the  day  on  which  its  establishment  is  registered. 
Such  duration,  however,  may  be  prolonged  with  the  sanc- 
tion of  the  government. 

Article  4.  The  capital  of  the  bank  shall  be  ten  million 
yen  divided  into  one  hundred  thousand  shares  of  one  hun- 
dred yen  each.  Such  capital,  however,  may  be  increased 
with  the  sanction  of  the  government. 

Article  5.  The  share  certificates  of  the  bank  shall  always 
bear  the  names  of  the  holders,  and  none  but  the  Imperial 
subjects  shall  be  entitled  to  become  shareholders  of  the 
bank. 

Article  6.  The  government  shall  subscribe  for  thirty 
thousand  of  the  shares  of  the  bank. 

The  shares  thus  subscribed  by  the  government  shall  be 
inalienable. 


42 


Chapter  II.  Directors. 

Article  7.  The  Bank  of  Chosen  shall  have  one  Governor, 
three  Directors  or  more,  and  two  Auditors  or  more. 

Article  8.  The  Governor  shall  represent  the  bank  and 
control  all  the  business  of  the  bank. 

When  the  Governor  is  prevented  from  attending  to  his 
duties,  one  of  the  directors  shall  act  for  him,  and  when 
the  office  of  the  Governor  is  vacant,  the  latter  shall  attend 
to  the  duties  of  that  office. 

The  Directors  shall  assist  the  Governor,  and  undertake 
the  sectional  management  of  the  bank  under  his  direction 
under  the  provisions  of  the  by-laws. 

The  Auditors  shall  inspect  the  business  of  the  bank. 

Article  9.  The  Governor  shall  be  appointed  by  the  gov- 
ernment, and  his  term  of  office  shall  be  for  five  years. 

The  Directors  shall  be  appointed  by  the  Governor-Gen- 
eral of  Chosen  from  among  twice  as  many  candidates,  elect- 
ed at  a general  meeting  of  shareholders  from  among  share- 
holders holding  one  hundred  shares  or  more,  and  their 
term  of  office  shall  be  for  three  years. 

The  Auditors  shall  be  elected  at  a general  meeting  of 
shareholders  from  among  shareholders  holding  fifty  shares 
or  more,  and  their  term  of  office  shall  be  for  two  years. 

Article  10.  The  Governor  or  Directors  shall  not  be  al- 
lowed to  attend  to  any  other  duties,  or  engage  in  any  other 
mercantile  business  under  any  pretence  whatever,  save 
that  for  which  the  sanction  of  the  Governor-General  of 
Chosen  has  been  given. 


43 


J- 

Increases  in  Korea’s  National  Debt  During  Japanese 

Control. 

Total  National  Debt  as  reported  by  Japan  up  to  Decem- 
ber 31,  1917 $46,343,415.00 

National  Debt  at  commencement  of  Japanese  control 368,256.50 

Increase  during  Japanese  control $46,475,158.50 


ITEMS. 


Date. 

Creditor. 

Rate. 

Amount. 

December 

1st,  1908 

Industrial  Bank,  Japan 

6 54 

$6,481,960.00 

March 

1st,  1913 

Imperial  Treasury,  Japan 

4 

526,325.00 

April 

1st,  1913 

Imperial  Treasury,  Japan 

5 

15,000,000.00 

October 

1st,  1914 

Deposit  Section,  Finance 

Department,  Japan 

554 

2,500,000.00 

March 

1st,  1915 

Deposit  Section,  Finance 

Department,  Japan 

554 

1,320,435.50 

August 

1st,  1915 

Imperial  Treasury,  Japan 

554 

5 54 

1,500,000.00 

August 

1st,  1915 

Bank  of  Chosen,  Korea 

6 

750,000.00 

October 

1st,  1915 

Imperial  Treasury,  Japan 

554 

1,250,000.00 

October 

1st,  1915 

Deposit  Section,  Finance 

Department,  Japan 

554 

155.556.00 

March 

1st,  1916 

Bank  of  Chosen,  Korea 

6 

3,000,000.00 

March 

1st,  1916 

Imperial  Treasury,  Japan 

554 

1,567,163.50 

July 

1st.  1916 

Imperial  Treasury,  Japan 

554 

1,500,000.00 

September 

1st,  1916 

Imperial  Treasury,  Japan 

554 

2.500.000.00 

March 

1st,  1917 

Imperial  Treasury,  Japan 

554 

1,292,500.00 

December 

1st,  1917 

Imperial  Treasury.  Japan 

554 

7,499,475.00 

Total  $46,843,415.00 

Annual  Interest  Charge $2,522,063.37 


44 


K. 

Excess  Taxes  Collected  During  Japanese  Control  of  Korea. 

Comparative  Statement  Between  Taxes  Collected  During 
Last  Year  of  Korean  Control,  $3,561,907.50,  and  Taxes 


Collected  Since  Under  Japanese  Control. 


Total  Collected 

Excess  Collected 

Year. 

Under  Japanese. 

Over  Normal  Tax. 

1906.  . 

. $3,699,372.00 

$137,464.50 

1907.  . 

. 4,951,436.00 

1,389,528.50 

1908.  . 

. 6,144,100.50 

2,582,193.00 

1909. . 

. 6,747,817.00 

3,185,909.50 

1910. . 

. 7,393,666.00 

3,831,758.50 

1911.  . 

. 6,595,492.00 

3,033,584.50 

1912.  . 

. 6,842,432.00 

3,280,524.50 

1913.  . 

. 7,642,303.00 

4,080,395.50 

1934. . 

. 10,101,815.00 

6,539,907.50 

1915. . 

. 10,575,029.00 

7,013,121.50 

1916.  . 

. 10,731,620.50 

7,170,712.00 

1917. . 

. 11,416,684.50 

7,854,777.00 

Total,  $92,841,767.50  Excess  over  Korea,  $50,098,877.50 


